British Pound Hits 3 Month High on Record CPI
The British pound strengthened against the US dollar and Euro as consumer prices hit a record high.
Producers are passing on their highest costs to consumers because the rise in prices is not just limited to food and energy. This was much stronger than the market expected and well above the Bank of England’s 2 percent target. The annualized pace of CPI growth has now hit 3.8 percent. The BoE has already warned that inflation could rise above 4 percent. Meeting this prediction will not be enough to force the BoE to raise rates. House price growth remains near a 30 year low while retail sales took another dive in the month of June. UK labor market data is due for release tomorrow which could determine whether the British pound will hold onto its impressive gains.